Compute the bond duration and the bond convexity

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Reference no: EM132009547

Consider a 20 year bond with a face value of $1000 paying annual interest of $120. The bond has been taken outstanding for 14 years and interest currently required a return of 11% from investment with similar risk.

Compute:

1) The bond’s duration

2) The bond’s convexity

Reference no: EM132009547

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